New York Real Estate Salesperson ExaminationNew York State Specific Laws and RegulationsHard
A real estate salesperson is showing a property to a prospective buyer who expresses concern about the property's proximity to a former industrial site. The salesperson, eager to make the sale, states, 'Don't worry, the state cleaned all that up years ago; it's perfectly safe now.' The salesperson has no independent verification of this claim. This action could be considered an example of:
- AMaterial misrepresentation.
- BReasonable care.
- CFiduciary duty.
- DPuffing.
Show answer & explanationAnswer & explanation
Correct answer: A. Material misrepresentation.
Making a false statement of fact about the safety of a property, especially concerning environmental conditions, without having verified information, constitutes material misrepresentation. This is different from puffing, which is exaggerated opinion.
Why the other options are wrong
- B. Reasonable care requires a salesperson to exercise competence and diligence. Making unverified factual claims demonstrates a lack of reasonable care.
- C. Fiduciary duty involves loyalty, disclosure, obedience, confidentiality, accounting, and reasonable care. This action violates the duties of honesty and reasonable care.
- D. Puffing involves exaggerated statements of opinion ('best view in town') that are not factual claims. The salesperson's statement here is presented as a factual assertion.
Material Misrepresentation
A false statement of a material fact that a licensee knows to be false or makes recklessly without knowing if it's true, which induces another party to act to their detriment.
- Involves a false statement of fact.
- Must be material (important to decision).
- Can be intentional or negligent.
Memory trick: Truthful talk, no fact-walk, always check the legal clock.